Unreported / Non-Citable
Background
Mavex Shops at Flower Mound, LP sued AmGuard Insurance Company in Texas state court for breach of contract. Mavex alleged that AmGuard issued it a commercial general liability policy covering injuries to invitees at its property and was obligated to assume and pay for Mavex’s defense when an individual sued over alleged injuries there.
According to Mavex, AmGuard took approximately two months to assign defense counsel, causing Mavex to incur unnecessary defense costs. AmGuard removed the action to federal court based on diversity jurisdiction and moved to dismiss, arguing in part that the claim was time-barred. Mavex did not timely oppose the motion.
The Court’s Holding
The court granted AmGuard’s Rule 12(b)(6) motion. Although Texas generally provides a four-year limitations period for breach-of-contract claims, the court explained that parties may contract for a shorter period of at least two years. The policy required any action against AmGuard to be brought within two years and one day after the cause of action first accrued, which the policy defined as the date of the initial alleged breach.
The alleged delay in assigning counsel ended no later than April 9, 2024, but Mavex did not file its complaint until May 4, 2026. Because the filing came more than two years and one day after accrual, the court held that the claim was time-barred and dismissed it with prejudice.
Key Takeaways
- Texas law permits insurance policies to shorten the limitations period for contract claims to no less than two years.
- The policy’s two-years-and-one-day suit limitation was valid and enforceable.
- Mavex’s claim accrued no later than the end of AmGuard’s alleged delay in assigning counsel, making the May 2026 complaint untimely.
Why It Matters
The decision underscores that contractual suit-limitation provisions can foreclose insurance claims before Texas’s ordinary four-year contract limitations period expires. Insureds seeking reimbursement for defense costs should identify both the policy’s filing deadline and its contractual accrual language promptly after an alleged breach.